Integrated reporting in voluntary setting and its impact on tax avoidance: does audit committee effectiveness play a role?

Purpose The purpose of this study is to investigate the relationship between integrated reporting (IR) and tax avoidance with the interaction effect of audit committee effectiveness (ACEF) as moderating factors. Design/methodology/approach Using a data set of 373 non-financial listed firms of Gulf Cooperation Council (GCC) stock exchanges from 2016 to 2023, this study adopts panel data regression method with additional robust econometrics such as System Generalized Method of Moments and alternative measures for tax avoidance. Findings The findings of this study show that there is a significant negative association between IR and tax avoidance, suggesting that firms with more IR engagement are less likely to conduct tax avoidance. This result remains stable over various methodological approaches, further confirming that the IR can be a deterrent against tax avoidance activities, despite the voluntary regulatory setting. However, this study interestingly found that ACEF has no significant moderating effect on this relationship, indicated that audit committees do not significantly affect the relationship between IR and tax avoidance. This study prove that Integrated Report is rather complement not substitute governance tools by enhancing transparency, accountability and stakeholder oversight. Practical implications This research offers valuable contribution to policymakers and corporate executives in the GCC region, highlighting the potential of IR as a tool for lower tax avoidance and the need to strengthen the role of audit committee. Originality/value To the best of the authors’ knowledge, this study is among the first to measure ACEF using a comprehensive index in the context of tax avoidance and IR in voluntary setting of GCC.